Costa Rica has always been a progressive beacon on Central America's benighted street: the reliable democracy that makes a point of eschewing a military so it can spend more on schoolteachers. But until the Feb. 7 presidential election, it had yet to select a female head of state, something its two less-developed neighbors, Nicaragua and Panama, did long ago. Now a new President-elect, Laura Chinchilla, has finally struck a blow for Ticas, female Costa Ricans.

Yet Chinchilla's gender may not be as important as her age. As a vigorous 50-year-old replacing her political mentor, 69-year-old President Oscar Arias, the center-right Chinchilla (pronounced cheen-chee-ya) is ushering in a new generation of leadership at a moment when Costa Rica's stature as the Switzerland of Central America is in decline. Its democracy remains the region's strongest, but it has been rocked in recent years by a spate of high-level government corruption scandals, a spike in drug-trafficking violence and a widening gap between rich and poor. Costa Rica's image as Central America's moral authority also took a hit last year when Arias  who won the 1987 Nobel Peace Prize during his first presidency for brokering an end to the region's civil wars  was largely ignored in his efforts to resolve the Honduran coup crisis. (See Oscar Arias' fading legacy in Costa Rica.)

Recovering the Tico mojo is Chinchilla's prime mandate  provided she proves to be her own woman and not, as her opponents insist, Arias' political proxy. "Costa Rica has certainly lost some of its dynamism," says Susan Kaufman Purcell, director of the Center for Hemispheric Policy at the University of Miami. "But if Chinchilla turns out to be the leader she shows promise of being, she can get that back." As she declared victory last Sunday night, Feb. 7, in the capital, San José, with 47% of the vote vs. 25% for her main center-left rival, Otton Solis, Chinchilla announced, "We are making history." But she also pledged to "make decisions, not avoid or postpone them." (See a story about Oscar Arias' win of the Nobel Peace Prize.)

That's as important to Central America as it is to Costa Rica, which has long given the isthmus a model to emulate  something it still urgently needs. Central America may no longer be fighting the civil wars that ravaged it in the 1980s, but its problems are nonetheless mountainous and pose policy headaches for Washington in areas like the drug war, free trade and illegal immigration. The region's homicide rates, for example, are among the world's highest, as are its illiteracy and malnutrition indexes. Rule of law, as the Honduras debacle demonstrated, remains largely dysfunctional.

Many Costa Ricans feel that the Arias generation, which did such an impressive job keeping those problems at bay at the end of the 20th century, has let them leach into the country in the 21st. If Chinchilla's winning platform is any indication, rising drug-related violence worries Costa Ricans the most. ("Security, security and more security," she promised.) But worsening social inequality is high atop her campaign's list as well, particularly when it comes to access to education. Schools used to be one of Costa Rica's largest sources of pride and a big reason First World high-tech giants like Intel invested in the country. But "most Costa Ricans feel the quality of public education has dropped off considerably," says Jorge Mora, director of the Latin American Faculty of Social Sciences in San José. One indicator: in the 1990s, the wealthiest 10% of Costa Rica's population earned 15 times what the poorest tenth made; in the 2000s that figure was almost 25 times.

Even Costa Rica's vaunted green luster has begun to brown. Its rain-forest protection and ecotourism are still envied in the Americas; Chinchilla says she's committed to Arias' goal of making the country carbon-neutral by 2021. But Arias has been accused of lax national-parks preservation and pandering to open-pit mining ventures in Costa Rica.

Chinchilla, as a result, has had to fend off suggestions by Solis and other political foes that she's a puppet of Arias, under whom she served as Vice President, and his social-democratic National Liberation Party, to which she belongs as well. The daughter of a former Costa Rican comptroller general, Chinchilla earned a master's degree in public policy at Georgetown University in Washington in the 1980s. But while she often wore indigenous fashions as a college student and criticized the Reagan Administration's involvement in Central America's conflicts, she is a social conservative, opposing abortion rights as well as gay civil unions and efforts to remove a clause in Costa Rica's constitution that makes Roman Catholicism the state religion. She's also earnestly pro-business, calling on Costa Rica to shoot for a Chilean level of development via increased free-trade accords and ramped-up export of goods like microchips.

Political analysts say Chinchilla, who takes office May 8, has a talent for dialogue and coalition building, which she'll need when she faces Costa Rica's ultra-fractured Congress. Her center-right credentials set her apart from the other female heads of state in Latin America today: Chile's outgoing President, Michelle Bachelet, is a moderate socialist; Argentina's Cristina Fernández represents her Peronist Party's left wing; and the leading candidate in this year's Brazilian presidential election, Dilma Rousseff, hails from the leftist Workers Party. At the same time, Kaufman notes, Chinchilla follows a string of recent center-right presidential victors in the region, including Sebastián Piñera in Chile and Ricardo Martinelli in Panama, after a decade of leftward inertia. "Her election sends important signals to women around the region in that regard," says Kaufman.

Mora points out that Chinchilla, a former Justice Minister, "is generally regarded as an incorruptible woman, which is a very important calling card right now for Costa Ricans," who in the past decade have seen at least two former Presidents investigated (but so far not charged) in major financial-kickback cases. Still, he says, "the generational change she represents is the most significant." Being the first Tica President is definitely important  but taking Costa Rica back to the future will matter even more.